Q1 data – Hoe gaan dit met die ekonomie?

Ons weet dit gaan sleg met die Suid-Afrikaanse ekonomie, maar wat kan ons leer uit die eerste kwartaal se data?

 

The key points:

January to March 2020 saw the South African economy in a third straight quarter of decline.

  • Household consumption and government spending were only just positive, while investment and imports declined.
  • The fall in imports was in a large part due to declining oil prices and some disruption of supply chains from China (specifically for intermediate inputs and machinery). Exports increased due to the depreciation of the rand.

There is only limited data available that give us an indication of what the impact of the supply-shock of the lockdown and the phased reopening of the economy will be.

  • Economists expect that even after the economy has opened up, the reduction in household and company incomes caused by the lockdown, will lead to a prolonged fall in demand.
  • The South African economy is expected to shrink by about 7% this year.

It seems that the stimulus from opening up the economy flattened out by late June.

  • Trends in electricity use show that by the middle of March 2020 electricity sent out by Eskom was 10% higher than the previous year, but by mid-April it was more than 25% lower. By the end of June, it was only 4% below the 2019 level.

Available data shows unemployment at a record level of 30.1%.

  • Employment figures are only available through to March, but smaller surveys indicate that more than a third of formal private-sector employees were unable to work during the level-5 lockdown.
  • The 3.7 million applications that the UIF received for the Covid-10 Temporary Employer/Employee Relief Scheme equals a third of all formal employees in the private sector.
  • And many employers anticipate downsizing employment because of reduced demand.

The available indicators point to a liquidity crisis across business as incomes fell to near zero in April and demand has only come back slowly as the lockdown has eased.

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